Government tax adviser ‘sorry’ for banking role during Libor crisis

MPs on the committee were taking evidence about her appointment as chair of the Office of Tax Simplification after a two-year stint at Energy UK.

“I found myself in charge [at the BBA] at the time of the biggest banking crisis in history. I did what I could in the face of a hurricane. If someone who does a difficult job and finds themselves in a very tricky position does what they can, is thereafter told ‘you can’t do anything else’, you’ll never get anybody to do a difficult job again. I tried my best,” Knight said.

“I am so sorry I ended up at the BBA during the banking crisis. I’m so sorry it chose me to be its target. I’m so sorry it took a trade association into a different era. I’m so sorry I never persuaded the authorities to take over [setting] Libor [rates] earlier and I’m so sorry the banks brought about [the] financial disaster they did.”

Knight admitted she wished she had been stronger in dealing with the problems that were uncovered with Libor, the regime for inter-bank interest rates, which at the time the BBA administered. Knight had wanted the Bank of England to have observer status over Libor.

She also said she had disagreed with the judicial challenge mounted by the banking industry over compensation for the payment protection insurance (PPI) scandal. The challenge was brought to a sudden halt shortly after Lloyds Banking Group started paying out compensation in May 2011. The misselling scandal has proved to be the costliest in history, amounting to £26bn and rising.